Well, what could have / might have been a quick engagement has likely turned into a quagmire. With Marines and other troops along with additional naval vessels being deployed to the region, it is likely that this war will escalate and continue for some time. Or it may not. There doesn’t seem to be a strategy or plan that define what the end goals of this action are. So, like most people, we are in the dark. Iran appears to be following a scorched Earth policy…attacking anyone and anything no matter the immediate consequences in the hope that their enemy (US, Israel, and whoever else supports or, at least, doesn’t defy their efforts) eventually declares the cost too high. As loss of lives to the US and Israel, for now, appear minimal, Iran’s strategy is to attack economic targets in the region including blocking natural gas, oil, and shipping vessels from going through the Strait of Hormuz. Iran’s missile attack towards Diego Garcia was meant more to strike fear about its ability to hit London and Paris than in any damage it could cause on the UK-US military base. Considering that the nation has launched satellites, an intercontinental missile capability shouldn’t be a surprise…although its accuracy is still unknown.

As energy prices rise, economists are seeing a resultant recession forthcoming. In the US, it is estimated that the cost is more than $2 billion per week. Additionally, a $200 billion request by the Department of War to fund the effort is being requested, though whether that passes or not at that level in a divided Congress is currently an unknown.

Meanwhile, the Russia-Ukraine conflict continues, and the Pakistan-Afghanistan War falls out of the news cycle, except for the occasional article.

The fear of the unknown remains a driver of defense stocks. The Invesco Aerospace & Defense ETF (NYSE: PPA) — as of 3/22/2026 — has seen inflows for 27 consecutive trading days even with the stock market volatility. Year to date, our SPADE Defense Index is up 7.14% and up 43.07% over a 1-year period. This compares to a 4.89% YTD decline and a 14.69% gain in the S&P500, respectively. Investing in defense sector stocks remains strong.